New car tax changes which would dramatically reduce running costs for thousands of motorists are “desperately needed”, according to a leading expert.
Denis Watling, Managing Director at ChargeGuru UK, is the latest industry specialist to demand an urgent reduction in electric car VAT rates.
EV owners currently pay 20 percent VAT to top up their vehicles at public charging bays compared to just five percent for those charging at home.
It means those without access to off-street parking such as in big cities like London are forced to pay more.
Denis stressed that the UK’s electric vehicle transition would become “more challenging” without a cut in VAT rates.
Denis explained: “Reducing the 20 percent VAT rate is a vital step in democratising the charging experience.
“Not everyone has access to home charging at the five percent rate, and it’s these individuals that desperately need the support of the Government to make the switch.
“Transitioning towards EVs in the next decade is a landmark environmental policy of the UK Government, and will be made all the more challenging without a proper reduction in VAT.
“The EV industry must jointly lobby – regardless of whether they offer home or public charging – for affordable and accessible charging in order to ensure the number one priority is met – to help people choose greener transport.”
They stressed VAT was a “broad-based tax on consumption” and not solely applied to vehicles.
They claimed that standard rates are limited by “legal and fiscal considerations” but stressed that a domestic energy reduction is in place so families do not have to “bear all VAT costs”.
The report read: “Whilst this relief was not designed or introduced for charging EVs at home, this relief applies for all uses of domestic energy. Electricity supplied at EV charging points in public places is subject to the standard rate of VAT (20 percent).
“Expanding the VAT relief already available would impose additional pressure on the public finances to which VAT makes a significant contribution.”
